Which of the following is a common type of retirement plan?

A pension plan is a common type of retirement plan because it is specifically designed to provide individuals with a fixed sum of money upon retirement, typically based on factors such as salary history and length of service. This plan is funded by the employer, which makes it a reliable source of income for retirees. Pension plans are structured to ensure that employees receive regular payments after they retire, thereby providing financial security and stability during their retirement years.

Pension plans are widely recognized and used by many organizations, making them a standard offering in the realm of retirement benefits. They contrast with other options that may not provide the same level of guaranteed income or structured contributions, such as pay-as-you-go plans, which often rely on current taxation levels and funding rather than pre-committed contributions for future payouts.